{"id":66898,"date":"2025-01-28T08:38:32","date_gmt":"2025-01-28T00:38:32","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=66898"},"modified":"2025-12-16T10:30:41","modified_gmt":"2025-12-16T02:30:41","slug":"cost-matters-investing-stock-market","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/cost-matters-investing-stock-market","title":{"rendered":"Why Cost Matters When Investing In The Stock Market"},"content":{"rendered":"

In partnership with \"webull<\/strong><\/p>\n

Do you know all the costs of investing in the stock market? For many of us, we focus on the costs that come from taking on the risks (and the opportunities) of investing in the hopes of fruitful returns.<\/p>\n

However, just like buying a car, we don\u2019t necessarily realise all of the other costs and fees that come with it and how it can affect our finances down the line.<\/p>\n

In this article, we\u2019ll break down some common fees and costs you might face when investing in the stock market, why they can affect your returns, and how you can reduce those costs.<\/p>\n

<\/span>What are the costs of investing?<\/span><\/h2>\n

There are numerous costs and fees associated with stock market investing and it can differ from the Malaysian markets to the US markets.<\/p>\n

But in general, here are the key costs and fees that you will need to pay when investing:<\/p>\n

Brokerage fee\/commission<\/h4>\n

A brokerage fee is any commission or fee that a broker charges you to facilitate trading or provide any other services.<\/p>\n

The fee\/commission is usually calculated through a percentage of the total value of the trade\/transaction. For example, if you buy RM5,000 worth of shares and the commission rate is 1%, then the broker will receive RM50 as their fee\/commission.<\/p>\n

The commission range can vary depending on the broker or type of securities, but the minimum percentage ranges from 0.15% to 0.6%<\/a>. More often than not, the brokerage fee\/commission can be one of the major costs (other than the purchase price itself) that you\u2019ll face as an investor.<\/p>\n

Clearing fee<\/h4>\n

A clearing fee is what you pay to complete the transaction of purchasing securities through a clearinghouse. It\u2019s essentially a service in which to ensure the correct and timely transfer of funds to the seller and securities to the buyer.<\/p>\n

Bursa Malaysia is the Malaysian clearinghouse and their fees are currently set at 0.03% of the transaction value with a maximum fee of RM1,000. It is a necessary cost to consider when you\u2019re trading securities.<\/p>\n

Stamp duty<\/h4>\n

All legal documents in Malaysia are required to pay a stamp duty tax, including securities transactions. The fee is paid by the buyer of the security, with the current rate of 0.1% of the total value of the transaction.<\/p>\n

The maximum amount is capped at RM1,000 for shares or stocks and RM200 for marketable securities. Similar to clearing fees, stamp duty is a necessary cost that you\u2019ll take into account when buying securities or stocks.<\/p>\n

Other fees<\/h4>\n

On top of the fees discussed above, there are additional fees that you might encounter when investing such as buying-in<\/a> and trading fees<\/a> to inactivity and platform fees.<\/p>\n

Certain fees, such as platform fees, tend to vary so it\u2019s important to carefully check and review all the fees that are associated with the platform you\u2019re using.<\/p>\n

<\/span>How these costs impact your returns<\/span><\/h2>\n

Now that you know the different costs associated with trading platforms. Let\u2019s see how it all can add up if you\u2019re not careful.<\/p>\n

Let\u2019s say you\u2019re trading with a trade value of RM10,000. This means you bought Stock A at RM10,000 and when you go to make the transaction, the actual cost will be higher than RM10,000.<\/p>\n

This is because you\u2019ll have to pay for the commission fee, clearing fee, etc. Here\u2019s a breakdown of how the costs will be calculated:<\/p>\n\n\n\n\n\t\n\n\t
Trade value<\/th>Commission<\/th>Clearing fee<\/th>Stamp duty<\/th>Total<\/th>\n<\/tr>\n<\/thead>\n
RM10,000<\/td>RM60<\/td>RM3<\/td>RM10<\/td>RM10,073<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

At first glance, this might not seem much, but over time, the cost will accumulate and will have a significant impact on the overall returns that you get. While certain fees are unavoidable, such as the stamp duty and clearing fee, it\u2019s the commission that can have a more significant impact on your investment returns.<\/p>\n

<\/span>Getting more from your investments to maximise returns<\/span><\/h2>\n

Strategising your investments to lower the costs of trading while ensuring that you get the maximum returns, it\u2019s a good idea to use platforms that offer lower commissions\/fees or a more affordable pricing structure.<\/p>\n

Webull Malaysia<\/a> is one of the most prominent online trading platforms that\u2019s looking to cater to investors and traders who want to make the most out of their investments by offering competitive pricing structures for trading.<\/p>\n

They achieve this by giving new users a zero-commission fee period (90 days)**<\/strong> where they can buy and sell stocks on their platform without having to pay any brokerage fees.<\/p>\n

Here is how it works and how it compares to other trading platforms.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Total fees\/commission\/brokerage fees charged by brokers<\/th>\n<\/tr>\n<\/thead>\n
Market<\/td>Trading Value (RM)<\/td>Webull MY (90 days free commission)<\/strong><\/td>Platform A (180 days free commission)<\/td>Platform B<\/td>\n<\/tr>\n
Malaysia<\/td>100<\/td>RM0<\/strong><\/td>RM3 (platform fee)<\/td>RM1<\/td>\n<\/tr>\n
200<\/td>RM3 (platform fee)<\/td>RM2<\/td>\n<\/tr>\n
500<\/td>RM3 (platform fee)<\/td>RM5<\/td>\n<\/tr>\n
1,000<\/td>RM3 (platform fee)<\/td>RM9<\/td>\n<\/tr>\n
5,000<\/td>RM3 (platform fee)<\/td>RM9<\/td>\n<\/tr>\n
10,000<\/td>RM3 (platform fee)<\/td>RM10<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

If you decide to place multiple orders of single stocks in a single day, the calculations will be as per below.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t
Total fees\/commissions\/brokerage fees charged by brokers for multiple orders placed on a single stock in a single day<\/th>\n<\/tr>\n<\/thead>\n
Market<\/td>Trading Value (RM)<\/td>Transaction amount, few orders, single day<\/td>Webull MY (90 days free commissions)<\/strong><\/td>Platform A (free commission)<\/td>Platform B<\/td>\n<\/tr>\n
Malaysia<\/td>500,000<\/td>100,000<\/td>RM0<\/strong><\/td>RM3 (platform fee)<\/td>RM100<\/td>\n<\/tr>\n
50,000<\/td>RM3 (platform fee)<\/td>\n<\/tr>\n
200,000<\/td>RM3 (platform fee)<\/td>\n<\/tr>\n
150,000<\/td>RM3 (platform fee)<\/td>\n<\/tr>\n
Total<\/td>RM0<\/strong><\/td>RM12<\/td>RM100<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

After 90 days, Webull Malaysia\u2019s commission fees are introduced and here\u2019s how it compares to other platforms.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Total fees\/commission\/brokerage fees charged by brokers<\/th>\n<\/tr>\n<\/thead>\n
Market<\/td>Trading Value (RM)<\/td>Webull MY<\/strong><\/td>Platform A<\/td>Platform B<\/td>\n<\/tr>\n
Malaysia<\/td>100<\/td>RM5<\/strong><\/td>RM3.03 (platform fee + commission)<\/td>RM1<\/td>\n<\/tr>\n
200<\/td>RM5<\/strong><\/td>RM3.06 (platform fee + commission)<\/td>RM2<\/td>\n<\/tr>\n
500<\/td>RM5<\/strong><\/td>RM3.15 (platform fee + commission)<\/td>RM5<\/td>\n<\/tr>\n
1,000<\/td>RM5<\/strong><\/td>RM3.3 (platform fee + commission)<\/td>RM9<\/td>\n<\/tr>\n
5,000<\/td>RM5<\/strong><\/td>RM4.5 (platform fee + commission)<\/td>RM9<\/td>\n<\/tr>\n
10,000<\/td>RM5<\/strong><\/td>RM6 (platform fee + commission)<\/td>RM10<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

While at first glance, it might look like the costs seem a bit pricey. However, if you were to make multiple orders placed on the same stock, on the same day, an amalgamation of commissions is applied.<\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t
Total fees\/commissions\/brokerage fees charged by brokers for multiple orders placed on a single stock in a single day <\/th>\n<\/tr>\n<\/thead>\n
Market<\/td>Trading Value (RM)<\/td>Transaction amount, few orders, single day<\/td>Webull MY<\/strong><\/td>Platform A<\/td>Platform B<\/td>\n<\/tr>\n
Malaysia<\/td>30,000<\/td>5,000<\/td>RM24<\/strong><\/td>RM27 (platform fee + commission)<\/td>RM30<\/td>\n<\/tr>\n
3,000<\/td>\n<\/tr>\n
8,000<\/td>\n<\/tr>\n
2,000<\/td>\n<\/tr>\n
3,000<\/td>\n<\/tr>\n
9,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

Overall, Webull Malaysia can still be more affordable to trade with for the Malaysian markets if you place multiple orders for a high investment amount of stock.<\/p>\n

What is trade amalgamation?<\/strong><\/p>\n

Trade amalgamation allows you to combine your orders to help you save on trading costs and is applicable for buy or sell trades.<\/p>\n

It is automatically applied if your order fulfils the following conditions:<\/p>\n